Both President Donald Trump and former Vice President Joe Biden have a plan for the future of the country. Here's how their plans could impact small businesses.
It's a common refrain that we've heard for months: "This election is the most important one of our time." And while that may come with a tinge of hyperbole to some, for many small business owners, the race between Democratic presidential nominee and former Vice President Joe Biden and incumbent Republican President Donald Trump will have major implications for years to come.
Small business is a major backbone of the U.S. economy, and both men have differing views on how the country should work. It's with that in mind that we break down some of the key issues facing American small business owners and lay out what each candidate has proposed.
Key issues for small businesses in the 2020 election
With nearly 32 million small businesses stretched across 50 states, five major territories, multiple minor islands and a single federal district, the American entrepreneur could play a major role in this race. In fact, a recent survey by Vistaprint that polled 500 American small business owners found that 95% of respondents said they plan to vote this November.
This election in particular has many small business owners concerned. According to Vistaprint's survey, 1 in 5 respondents said "my business could be in jeopardy based on how the election goes," with 1 in 10 saying they were worried they would have to shut down if their candidate didn't win. And while many of the issues that will be adjudicated at the polls in the coming weeks will be on their minds, respondents identified these issues as the most pressing:
The American economy continues to go through a tumultuous economic time, thanks to the COVID-19 pandemic. What was once a growing economy at the start of the Trump administration has morphed into periods of sustained job losses that spiked to historic levels and scores of small businesses going belly up. Though there were some efforts to buoy the economy through various stimulus and liability protection measures earlier this year, the Paycheck Protection Program (PPP) and a single $1,200 stimulus check are both distant memories. Researchers for Vistaprint found that just 11% of respondents said the government did enough to provide sufficient COVID-19 relief for small business owners.
Still, the government has opted to wait until after the election to consider additional stimulus efforts. Such a move has left Americans of all backgrounds nervous for their financial futures, including many small business owners who believe they won't be able to reopen if things continue down this current path.
Since its passage more than a decade ago, the Affordable Care Act (ACA) has been the law of the land as it pertains to healthcare. Since healthcare is inexorably tied to employment in the U.S., small business owners have had a particularly intimate relationship with the policy. Opponents to the ACA have said the law was too expensive and an executive overreach, while proponents contend the policy has helped reduce the number of uninsured adult Americans.
Taxes have long been a staple of political discourse between the political parties, and it's no surprise that the Biden and Trump camps have different views on the matter. After taking office, Trump signed the Tax Cuts and Jobs Act of 2017 into law, implementing one of the largest changes to the tax code in decades.
Chief among those changes were lower business tax rates for pass-through entities, as well as sweeping changes to what can and cannot be deducted as a business. While Republicans continue to push for lower tax rates, Democrats are calling for increased taxes on the wealthy.
The candidates' proposals
We reached out to both the Trump and Biden campaigns to get an idea of what each candidate plans to offer supporters if elected. Though we heard from a representative from the Trump campaign, we did not hear back from the Biden campaign, despite multiple attempts to connect. The following are some of the collected stances that the two candidates have taken on the above issues.
Running as a moderate Democrat, Joe Biden has been in public service for nearly five decades. As a career politician, he has long been lauded as a senator and later as vice president to Barack Obama for his ability to reach across the aisle.
The economy and COVID-19
For months, Biden has been running on a platform of building the economy up by rewarding "those who actually do the work," including the disabled, minorities and women.
If elected, Biden shows a willingness to bolster workers' rights, create racial parity within the economy, and build support for "deserving small businesses." Biden plans on establishing a "True Small Business Fund" of $60 billion that small lenders and community-based banks will disburse to local small businesses in a move he considers a stark contrast to the PPP, which saw major chains getting access to money meant for small businesses.
Biden's healthcare plan
Biden is running on a platform that calls for the protection and expansion of the Affordable Care Act. According to his campaign website, Biden plans to "build on the Affordable Care Act by giving Americans more choice, reducing health care costs, and making our health care system less complex to navigate." That includes creating a public option that's similar to Medicare, increasing tax credits to lower premiums and extending coverage for the middle class, and bolstering coverage for low-income houses.
That first point, a Medicare-like public option, is of particular interest to small business owners according to Biden, since he believes it will "bring relief to small businesses struggling to afford coverage for their employees."
By calling healthcare a right, Biden is running on a platform that he believes will reduce the predatory nature of health insurance providers while keeping them as part of the equation. That kind of thinking is antithetical to the Medicare for All pitch his primary opponent Sen. Bernie Sanders proposed, which sought to eliminate private health insurance in favor of a government-run healthcare system for all Americans.
Taxes under the Biden administration
If elected, Joe Biden has said he would alter the tax code yet again by focusing on some of the corporate tax cuts that became law in 2017. One of the first things he proposes in his platform is to increase the corporate tax rate from 21% to 28% in a bid to make wealthy Americans "pay their fair share." His platform also seeks to tax all foreign earnings of U.S. companies, establish a tax penalty for corporations that ship jobs overseas and impose a 15% minimum tax on book income.
Under Biden's plan, the top individual income rate will go up to 39.6% from 37% at its current rate while forcing anyone making more than $1 million to pay the same amount on investment income as they do on their wages. He plans to do this while refraining from raising taxes on anyone making less than $400,000 a year. Small business owners with families will be able to take advantage of the expansion of the Child Tax Credit, as well as various tax cuts and credits, to decrease their taxes.
As the incumbent, Donald Trump has had the last four years to shape American policy to his will, with the help of a Republican-controlled Senate and a more conservative-friendly judicial system. Courtney Parella, deputy national press secretary for Donald Trump's re-election campaign, wrote in an email to business.com about what the negative implications of a Biden presidency could be for small businesses.
"This president has helped small businesses thrive by removing burdensome regulations from the Obama-Biden administration, allowing additional tax deductions, and helping small businesses keep their employees on the payroll throughout the pandemic with the Paycheck Protection Program," said Parella.
Trump's economic record
At the beginning of his presidency, Trump touted a burgeoned economy just years after the great recession of 2008 put America – and the rest of the world – to its knees. Looking back to those times, Parella pointed to a CNBC/SurveyMonkey poll from February that showed 64% of small business owners "approved of the way President Trump [was] handling the U.S. economy," with 47% saying they strongly approved.
Those numbers came just a month before the COVID-19 pandemic swept the country, causing widespread economic hardship as states shut down businesses and the economy ground to a halt as a result. Still, Parella and the Trump campaign point to the PPP and other stimulus efforts as successful ways they helped keep small businesses open. According to the campaign, 5.1 million small businesses received a total of $521 billion in loans through the PPP, supporting approximately 51.1 million jobs.
The Trump campaign also cites nearly 3.5 million new business applications that were filed in 2019 compared to the 2.9 million applications in 2016 as a sign that up until the pandemic, new businesses were booming across the country. In fact, the campaign says the number of new applications has never dipped below 775,000 since the president was inaugurated in 2017.
Though the campaign site does not offer specifics, a bulleted list of plans for the economy mentions Trump's plan to "create 10 million new jobs in 10 months, create 1 million new small businesses ... and enact fair trade deals that protect American jobs."
"President Trump delivered the greatest economy in the world once, and he's already doing it again," Parella said.
Trump's healthcare plan
For years, Trump's healthcare plan has echoed the sentiments of Republicans since 2010, pledging to "repeal and replace" the ACA. Neither the Republican leadership nor Trump have explained what they will replace the ACA with.
Trump's campaign points to past healthcare moves that officials believe help small businesses. One of the things noted is the establishment of a rule that expanded health reimbursement arrangements back in June 2019 that made it easier for an estimated 800,000 businesses to offer coverage to workers. Trump's campaign also points to the expansion of Association Health Plans, which let small businesses join together to increase their buying power and get healthcare plans usually meant for larger entities.
Looking forward, the Trump campaign website lists "cut prescription drug prices, put patients and doctors back in charge of our healthcare system, lower healthcare insurance premiums and end surprise billing" as potential healthcare fixes, though no detail is provided.
Trump's tax proposals
Trump continues to plan for more tax cuts. Some plans he's floated in recent months have been a potential payroll tax cut, a potential cut to the individual tax rate from 22% to 15%, and reducing taxes on capital gains. Details on all these are scarce at the moment.
When we reached out to the campaign for details on potential tax changes, Parella pointed to Trump's past success with the TCJA, citing the 20% tax deduction that small businesses – particularly pass-through entities – now enjoy on up to $326,000 of income. According to the campaign, more than 90% of small businesses can claim that deduction.